Question

If Bangladesh is open to international trade in oranges without any restrictions, it will ___________ tons of oranges. Suppose the Bangladeshi government wants to reduce imports to exactly 120 tons of oranges to help domestic producers. A tariff of _________ per ton will achieve this. A tariff set at this level would raise $_________ in revenue for the Bangladeshi government.

Answer 1

Question Completion:

Assume that the price per ton of oranges in the international market is $810 and equilibrium is established at the price of $900 for 120 tons.

Answer:

If Bangladesh is open to international trade in oranges without any restrictions, it will ____import____ tons of oranges. Suppose the Bangladeshi government wants to reduce imports to exactly 120 tons of oranges to help domestic producers. A tariff of ____$90____ per ton will achieve this.  A tariff set at this level would raise $___10,800______ in revenue for the Bangladeshi government.

Explanation:

A tariff of $90 per ton will raise the price of a ton of oranges to $900 ($810 per ton as indicated on the question).  When the price is raised to $900 in the domestic market, the quantity demanded will equalize with the quantity supplied at 120 tons.